Business confidence lowest in nearly five years, BDO says

He also put pressure on the Bank of England to respond to pressures on businesses by lowering borrowing costs, which could drive up lending and ease cost burdens.

“Decisive action like further interest rate deductions and a clear roadmap of what’s ahead is critical if [businesses are] to grow and invest,” Knight said.

Business confidence tremors

The BDO survey is the latest set of business confidence figures suggesting the UK economy’s start to the year could be tougher than expected.

The Institute of Directors’ headline sentiment figure rose slightly though employment expectations fell back.

S&P Global and the Confederation of British Industry (CBI) have also suggested business leaders were fretting about high cost loads over the coming months, with investment being channeled to technology over hiring more staff.

The Labour government has been blamed for dampening the jobs market with higher employment taxes, consecutive rises in the national living wage and the addition of red tape through the Employment Rights Bill.

Internal government analysis has suggested workers’ rights reforms could weaken employment further and lead to a jump in tribunal cases.

Business leaders are now holding out for some victories in consultations over aspects of the bill, with union boss powers and sanction terms among the issues to be decided over the coming year.